Report: Promoting primary care can lower overall Medicare costs

AHA NewsApr 16, 2012

Increasing Medicare payments for primary ambulatory care “can help bend the Medicare cost curve,” according to a recent report by the Commonwealth Fund.

Researchers from the Center for Studying Health System Change modeled the effect a permanent 10% increase in Medicare payments for primary ambulatory care would have on overall Medicare spending (the “Patient Protection and Affordable Care Act” temporarily increases payments to primary care providers by 10% for five years). The study found that, while the higher payments would increase primary care visits by 8.8% and raise the overall costs of primary care by 17%, the increase in primary care services would in turn lower Medicare costs for other services for a net decrease in costs to the Medicare program of 2%. “While we can only speculate on the underlying mechanisms that might be driving our findings, the most logical explanation is that more primary care can prevent ambulatory care-sensitive conditions from getting worse, preventing hospitalizations, emergency room visits and outpatient procedures, or reducing the severity of cases when inpatient care is required,” the researchers state.

“Savings in post-acute care follow from fewer and less-severe hospitalizations.”